Despite its earlier announcement of its intention to sell off its Malawian assets, ASX-listed Intra Energy Corporation (IEC) says it is still forging ahead with plans to develop the 120MW Pamodzi Coal-fired power generation project at Chipoka in Salima.

The Aussie firm last year announced its intention to sell Malawian subsidiaries which include Malcoal Mining Limited, Pamodzi Power Limited, and Intra Energy Trading Limited

with a view to the long term supply of coal to the 120MW Pamodzi Power Station from its Tancoal Mine in Tanzania.

The company said it came up with the decision to sell the assets due to poor sales from the Malcoal Mine as a result of an increase in coal imports from neighbouring Mozambique and the adoption of new trade policies in Tanzania that have restricted companies operating in that country from importing coal from Malawi and other neighbouring countries.

However, Intra Energy says in its quarterly report ending March 2017 that despite continuing with arrangements to sell the Malawi assets, the company is forging ahead with the Pamodzi Power Project and has so far signed a term sheet relating to the Power Purchase Agreement (PPA) with Electricity Supply Corporation of Malawi (ESCOM) following lengthy negotiations with the government of Malawi.

This term sheet will form part of the sale of the Malawian entities, and in return Tancoal from Tanzania will gain an option to supply coal to the power station in Malawi, which will be located across Lake Malawi,

says CEO for Intra Energy Tam Brereton in the report.

He says the sale of the Malawi Operations is pending tax clearance which has been further delayed but no production was undertaken at Malcoal Mine in the quarter and operations have stopped.

Project Pamodzi was identified by the recent review of Unsolicited Independent Power Producers (UIPPs) done by independent consultants Mott MacDonald as one of the only two coal-fired power station projects on the list of UIPPs to be considered for inclusion in Malawi’s Integrated Resource Plan (IRP) study.

The Malawi Government and Intra Energy Corporation (IEC) already signed a memorandum of understanding to construct the 120MW coal fired power station at Chipoka in Salima to sell power to the Electricity Supply Corporation of Malawi (ESCOM).

Intra Energy is a dominant coal supplier to industrial energy users in the Eastern Africa region and has been developing the Pamodzi Coal-fired power project in Malawi alongside Ngaka Coal fired power project in Tanzania.

***

This piece was initially published in Malawi’s Mining & Trade Review Issue Number 50 (June 2017).

The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.